Literature Review-Fdi in Retail

Is written solely for educational purposes for MBA and MSc student level. Authors have a vested interest in internal market growth represented by aggregate consumer sales was a significant determinant of FDI into Brazil.

As a set of business activities that add value to goods and services sold to consumers, retailing involves key strategies in order to build a sustainable, competitive advantage for companies (Peterson & Balasubramanian, 2002). These strategies involve identifying a retailer’s target market and satisfying those needs. Through observing the retail strategy used by the company T2, this essay will ascertain and analyse their retail mix in order to determine the competitive advantage T2 has and whether it is sustainable or not.

As 70% of employment is coming from the agriculture sector, hence this form of retailing is mostly seen in those areas and of course to some part of urban India there is a lot of ups and downs for opening of sector for direct investment from the foreign players but government cannot neglect the interest of small players. One of main reason for not opening this sector to FDI is it may decrease the employment in the Unorganized sector and increase the

The government is also relaxing FDI norms in other sectors for foreign investors to invest. FDI in multi-brand retail has been allowed up to 51 per cent. The minimum requirement for the FDI is US$ 100 million, of which at least 50 per cent must be invested in 'backend infrastructure' within three

Corbishley (2012: 1) describes economic downturn as a factor that “pushes” retailers out of their home countries. Recessions are the major causes of retail internationalisation and during these periods, foreign markets appear

That is why fdi (foreign direct investment) show huge growth with the last decade. Many foreign companeis (pepsico, nokia, walmart, general electrical etc) and bank (citi bank, standard chartered, abn amro etc) are entering in India day by day however many more is to come. |

An interdisciplinary research agenda has arisen in the past two decades to study the significance of emerging retail MNCs as part of the process of globalization. The internationalization of retailing has been a central topic in the business literature particularly in retail management (Alexander 1997; Alexander and Quinn, 2002; Bianchi and Arnold, 2004; Goldman, 2001; Tseng and Foster, 2006; Palmer 2005; Cao and Dupuis, 2009). The issues studied in that literature include motives for internationalization, modes of market-entry, retail format transferability, organizational learning and strategic failure and divestment. Scholars in economic geography have also contributed to this literature stream (Aoyama, 2007; Christopherson, 2007; Wrigley et al., 2005; Reardon et al., 2007). Topics include the impact of the host economy on market entry, the role of the institutional environment of the home market and the host market entered and divestment. Researchers in agricultural and developmental economics have studied the supermarket revolution in developing countries (Reardon and Hopkins 2006; Hu et al., 2004; and Humphrey, 2007). Researchers across the board have argued that the simultaneous process of internationalization and concentration of retail MNCs is leading to global oligopoly. According to

The growing concern for retailers is that the Chinese government is discussing adopting protectionist regulations in the retail industry. New regulations are showing signs already as the local government has selected a group of local retailers and is giving them financial support. It is the first stage of formation of the “national champions” - local retail companies which are expected to become the leaders of the retail industry. There are many reason why the Chinese government is compelled to undertake these actions such as the retail industry is expanding at a fast rate and from the local population’s perspective the key industry players that benefit from it the most are foreign companies. This viewpoint pressurises the government to protect the local retail chains, which are not able to compete against international retail giants because of the insufficient financial resources. Therefore these regulations are expected to favour domestic retailers in allocation of strategic locations and have been highly welcomed by national retailers. Under these circumstances it is of utmost importance for foreign retailers to re-assess their future strategies. As it was mentioned before the

On the other hand, The Network Model emphasizes the importance of relationships formation and building upon the growth and internationalization of firms (Ojala, 2009; Collinson & Houlden, 2005). Johanson and Vahlne (2003) argued that “distance” can be decreased as a result of trust building, experiential learning and individual relationships. Additionally, Hollensen (2004) found that some of the firms enter distant markets at an early stage as internationalization process grow speedily. Unlike Uppsala Model, it is believed that building a long term and stable inter-organizational relationships will impact on foreign market selection and expansion pattern of the firm (Axelsson and Easton, 1992) and these relationships act as bridges to new markets (Ojala, 2009).

It has been said that the only thing more difficult than being indifferent to India is to attempt to describe or understand India completely. Most retail and consumer products companies are no longer indifferent to India. It is the fourth largest economy in the world, in terms of Purchasing Power Parity (PPP) and is expected to rank third in 2010, just behind the United States and China. Moreover, recent liberalization of Foreign Direct Investments (FDI) policies for retail trading has reduced barriers to entry for single-brand retailers and for the first time allowed them to control their operations in India. It, thus, comes as no surprise that retail and consumer products are the fastest growing sectors in the Indian

India remains the third most attractive destination for FDI, after China and the United States of America, for 2013-2015, according to a survey of global companies conducted by UNCTAD. Foreign Direct Investment in India has increased from $ 1,04,411 in year 2000-2001 to $ 6,96,011 in 2011- 2012. The distribution of FDI inflow is concentrated to some sectors. Services , Construction, Communication, Drugs and Pharmaceuticals, Chemicals, Automobile Industry etc. are among the leading sectors which bag major share of FDI inflows. (Figure 2.1)

1. Predatory Pricing With its incredibly deep pockets Wal-Mart will be able to sustain losses for many years till its immediate competition is wiped out. This is a normal predatory strategy used by large players to drive out small and dispersed competition. This entails job losses by the millions.

Indian market is one of the largest market with high purchasing power. Lot s of work to be done in the field of logistics & supply chain management. It is not possible for Indian government alone to developed world class infrastructure and other allied facilities because of huge investment requirement . FDI in India has in a lot of ways enabled India to achieve a certain degree of financial stability, growth and development. In order to create new & more jobs , FDI is the success mantra now. FDI no doubt is creating innovation in retail sector but simultaneously it may pull down the local and domestic retailers of India which is surely a concern to worry about for Indian government. It reduces the gap between farm prices

Foreign Direct Investment (FDI) is the outcome of the mutual interest of multinational firms and host countries. The current debatable issue in India is whether to permit FDI in Multi Brand Retail (MBR) or not. This paper provides a study of various aspects of FDI in Multi Brand Retail. Firstly the paper examines the present set up of retail sector in India. Further it focuses on the benefits of FDI which are expected in terms of better quality, better technology, better customer services and infrastructural development of India. The paper also discusses the major concerns / risk associated in form of unemployment

Recently, the Government announced its intention to open up the retail sector to foreign investment. It is still, however, debating whether to allow 26 per cent or 49 per cent FDI in the sector.